| Transactions of the Week |  | |  | | Transaction Description: | | $7,500,000 Reposition Refinance of a Salt Lake City Retail Center. George Smith Partners successfully placed the $7,500,000 senior loan on a 54% occupied retail center in Salt Lake City, Utah. The owner has had to address long-standing challenges recapturing vacant anchor space. The lack of an anchor resulted in higher over-all vacancy and the property's underperformance, presenting a significant challenge to lenders. GSP demonstrated that the property's recent leasing velocity, (over 20,000 sf in six months and another 10,000 sf LOI outstanding at funding), was a direct result of the Borrower's aggressive leasing strategy. GSP identified a lender comfortable with a very experienced sponsorship and the property's location at the primary retail intersection in a strong market. | | | Rate: LIBOR + 3.0% | | Term: 3 Years + extensions | | Amort: Interest Only | | LTV: 65% | | Prepayment: 2%, 1%, open | | Recourse | | Brokers: Gary E. Mozer, Josh Roseman | | | |  | | Transaction Description: | | $2,000,000 Cash-Out Multifamily Refinance During Forbearance GSP refinanced a newly renovated West Hollywood apartment building as the asset obtained occupancy stabilization. Pricing is fixed for three-years at 4.24%, prior to floating at 315 basis-points over 6-month LIBOR. The Loan self-liquidates and amortizes over 30 years. |
Challenge: The Property had gone into maturity default with the prior lender, resulting in a brief forbearance period. The Loan Guarantor had created numerous family trusts and other entities for estate purposes, adding complexity to the underwriting and closing process, particularly for a small bank used to financing smaller less-sophisticated borrowers. The Guarantor had provided a preferred equity investment to the Borrowing Entity through an LLC, further complicating the underwriting and closing documentation. The Borrower required a return of their trapped equity despite the current loan default. |
Solution: The newly renovated property and desirable location obtained 100% occupancy immediately after renovation. The Guarantor proved a net worth far in excess of the loan amount. The Lender became comfortable with the Borrower structural issues with the extensive documentation GSP provided. All third party reports were ordered on a "rush" basis to minimize the forbearance period. Based on GSP underwriting, the Lender was comfortable cashing-out up to 20% of the Borrower's equity. | | | Rate: 4.24% Fixed for 3 Years | | Term: 30 Years | | Amort: 30 Years | | LTV: 65% | | Prepayment: 3-2-1, Open | | Recourse | | Lender Fee: Par | | Broker: Nathan Auslander | | | |  | | | | California Bank Aggressively Seeks Bridge Product A California based bank is aggressively seeking assets slated for reposition to fulfill their bridge loan allocation. The floating rate program offers up to 70% LTV with no prepayment penalty and a mini-perm option upon stabilization. Non-recourse is available for transactions sub-50% LTV. The Prime based loans are floored at 5.50% to $15,000,000. | | | | Hot Money | SoCal Bank: Bridge, Mini-perm, Construction Debt George Smith Partners is working with a new commercial lender consisting of a four-bank roll-up. With a clean balance sheet and no legacy issues, this regional lender will fund cash flowing or less-than cash flowing transactions to $30,000,000. Make-sense underwriting is used for sizing although strong recourse sponsorship is required for higher LTV and/or transactions involving moving pieces. Out-of-market transactions are considered for SoCal borrowers. Pricing is aggressive for clients who may not size for money center banks. | | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or TAugust@GSPartners.com | | | GSP Welcomes Stephen Stein to the Firm | George Smith Partners is proud to announce the addition of industry veteran Steve Stein to the firm. Mr. Stein holds the title of Vice President and serves an active role in commercial real estate loan production. Steve joins GSP after nearly 25 years with a national investment sales firm where he was responsible for regional manager oversight and 150 sales professionals. He was graduated from Arizona State University, Tempe with a Bachelor of Science degree in marketing and is currently active with multiple charities including the Jewish Federation of Greater Los Angeles and Los Angeles Children's Hospital. | | | Pascale's Perspective | European populists stoke the "fear factor"…... The situation continues to evolve. Previously, European leaders preached austerity and "take your medicine" to qualify for bailouts and to avoid defaults. Voters in Greece and France defied the status quo on Sunday and elected anti-bailout, anti-austerity leaders. The bond market is shuddering due to the uncertainty. Investors sought the safe haven of US Treasuries, driving the 10 year swap down below 2.00% (1.85% Treasury, 2.00% Swap as of today)…. CMBS spreads widened, but did not "blow out", so there is a confluence of fear and appetite for risk, all to the benefit of borrowers today. A typical 10 year full leverage retail/office/industrial loan is pricing at about 4.70%-4.80%, Fannie and Freddie are below 4.00% for full leverage…… …stay tuned… David R. Pascale, Jr. | |
No comments:
Post a Comment